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Northern Star Resources (ASX:NST) - Executive Chair, Bill Beament - The Market Herald
Executive Chair, Bill Beament
Source: Bloomberg
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  • Gold giant Northern Star Resources (NTS) is trading strong after releasing its latest quarterly sales and production figures for the December 2020 quarter
  • Over the three months to the end of December, Northern Star sold just under 253,000 ounces of gold — 11 per cent more than the quarter before
  • At this rate of sales, the company will fall comfortably within its guidance of between 940,000 and 1.06 million ounces of gold for FY21
  • However, an accounting blunder meant Northern Star had to re-issue its quarterly report with a downgraded profit
  • Initially, Northern Star said it made $100 million profit in the December quarter, but this was changed to between $75 million and $85 million in the re-issued report
  • Nevertheless, NST shares are still up 1.3 per cent this afternoon to $13.58 each

Gold giant Northern Star Resources (NST) is trading strong after releasing its latest quarterly sales and production figures for the December 2020 quarter.

The report comes ahead of a planned merger between Northern Star and fellow ASX-listed gold giant Saracen Mineral Holdings (SAR), under which the combined entities would become a top-10 global gold producer with a market cap of around $16 billion.

Strong sales, profit blunder

Over the three months to the end of December, Northern Star sold just under 253,000 ounces of gold — up 11 per cent on the quarter before. This figure is also at the top end of the company's December guidance wherein it predicted it would sell between 226,000 and 254,000 ounces for the quarter.

This means for the six months to the end of December 2020, Northern Star sold just over 480,000 ounces of gold. At this rate, the company is looking at around 960,000 ounces of gold sold for the full 2021 financial year — comfortably within its guidance of between 940,000 ounces and 1.06 million ounces.

However, some of the shine was taken off of an otherwise-glowing report when Northern Star had to re-issue the quarterly report document with a downgraded profit figure.

Initially, NST touted net profit after tax of $100 million for the December quarter, with free underlying cashflow of $93 million. Shares in Northern Star quickly spiked 2.31 per cent on the news.

However, two hours later, a replacement quarterly report was released to shareholders in which NST corrected its net profit to between $75 million and $85 million, and shares fell 1.68 per cent from their intraday high.

Nevertheless, the setback was only temporary and shareholders still reacted well to the rest of the report, which was unchanged.

Northern Star Chair Bill Beament said the quarterly results prove that the company is meeting its operational, financial, and strategic goals.

"It was a very robust performance with strong production and margins generating significant cashflow and enabling us to invest in further growth while strengthening our balance sheet in the process," Bill said.

He said the quarterly performance, particularly at Northern Star's Pogo mine, is a testimony to the skills and commitment of the team in the face of COVID-19.

"Our team managed more than 100 cases of COVID during the quarter," Bill said.

"This has inevitable impacts on productivity at many levels. But despite this, nearly 59,000 ounces were mine [at Pogo] in the quarter, costs were three per cent lower than in FY20, and free cashflow was strong," he said.

While roughly 59,000 ounces of gold was mined at Pogo alone, Northern Star managed to mine a total of 244,000 ounces of gold across its assets during the December quarter.

The second court date to finalise the merger with Saracen is slated for February 2, 2021.

Shares in NST have mostly recovered since their slight dip upon the re-issued report. At 2:55 pm AEDT, Northern Star shares are up 1.3 per cent to $13.58. The company has a $10 billion market cap.

NST by the numbers
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